CHAPTER 4 DEMANDING ETHICAL AND SOCIALLY RESPONSIBLE BEHAVIOR Ethics standards of moral behavior that is behavior accepted by society as right versus wrong It helps to ask yourself the following questions when facing an ethical dilemma o Is my proposed action legal o Is it balanced Am I acting fairly Would I want to be treated this way Will I win everything at the expense of another Win lose situations often become lose lose situations and generate retaliation from the loser o How will it make me feel about myself Would I feel proud if my family learned of my decision My friends Could I discuss the proposed situation or action with my supervisor The company s clients Will I have to hide my actions Has someone warned me not to disclose them Etc Compliance based ethics codes ethical standards that emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers Integrity based ethics codes ethical standards that define the organization s environment that supports ethically sound behavior and stress a shared accountability among employees Here are six steps many believe can improve U S business ethics 1 Top management must adopt and unconditionally support an explicit corporate 2 Employees must understand that expectations for ethical behavior begin at the top and that senior management expects all employees to act accordingly 3 Managers and other must be trained to consider the ethical implications of all 4 An ethics office must be set up with which employees can communicate code of conduct business decisions anonymously a Whistleblowers insiders who report illegal or unethical behavior 5 Outsiders such as suppliers subcontractors distributors and customer must be told about the ethics program 6 The ethics code must be enforced with timely action if any rules are broken That is the most forceful way to communicate to all employees that the code is serious Corporate social responsibility CSR a business s concern for the welfare of society The social performance of a company has several dimensions o Corporate philosophy the dimension of social responsibility that includes charitable donations o Corporate social initiatives enhanced forms of corporate philanthropy directly related to the company s competencies o Corporate responsibility the dimension of social responsibility that includes everything from hiring minority workers to making safe products o Corporate policy the dimension of social responsibility that refers to the position a firm takes on social and political issues President John F Kennedy proposed four basic rights of consumers 1 the right to safety 2 the right to be informed 3 the right to choose and 4 the right to be heard Insider trading an unethical activity in which insiders use private information to further their own fortunes or those of their family and friends Social audit a systematic evaluation of an organization s progress toward implementing socially responsible and responsive programs Four types of groups serve as watchdogs to monitor how well companies enforce their ethical and social responsibilities policies 1 Socially conscious investors insist that a company extend its own high standards 2 Environmentalists apply pressure by naming companies that don t abide by 3 Union officials hunt down violations and force companies to avoid negative to its suppliers environmentalists standards publicity 4 Customers make buying decisions based on their social conscience
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